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Insider buying increased significantly last week with insiders buying $120.89 million of stock compared to $8.03 million in the week prior. Selling was flat with insiders selling $596.16 million of stock last week compared to $596.17 million in the week prior.

Over 85% of the insider buying this week was driven by a cluster of insider purchases in United Continental Holdings (UAL) as discussed below.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped to 4.93. In other words, insiders sold almost 5 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 74.28. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Insider Sell Buy Ratio April 29, 2016

Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

United Continental is certainly in need of significant turning around as discussed in the Bloomberg Businessweek article United's Quest To Be Less Awful. While the stock is up over 78% over the last five years, it significantly trails its peers as seen in the chart below. Over the last year, the stock is down 25% even as the favorable tail winds of low oil prices, a growing economy and additional revenue from fees have helped the entire airline industry enjoy a new golden age. The stock is cheap but unloved. So are many other old guard companies like General Motors (GM) and IBM that offer respectable dividends while their investors wait to see if they turn around.

Director David L. Calhoun acquired 25,000 shares of this heavy equipment manufacturer, paying $77.44 per share for a total amount of $1.94 million. Mr. Calhoun increased his stake by 307.54% to 33,129 shares with this purchase.

Director Melina E. Higgins acquired 35,000 shares of this pharmaceutical company, paying $42.92 per share for a total amount of $1.5 million. These shares were purchased indirectly by Ms. Higgins's husband.

Shares of this home and security products company were sold by 2 insiders:

Chief Executive Officer Christopher J. Klein sold 390,000 shares for $57.22, generating $22.32 million from the sale. 230,000 of these shares were sold as a result of exercising options immediately prior to the sale.

President MasterBrand Cabinets David Randich sold 29,591 shares for $57.17, generating $1.69 million from the sale.

SVP & General Counsel Maryanne Lavan sold 21,720 shares for $233.19, generating $5.06 million from the sale. 14,720 of these shares were sold as a result of exercising options immediately prior to the sale.

Disclaimer Clients of Signal Partners, LLC and I may have positions in any of these stocks at any time. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

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